Rent-to-Own

Rent-to-Own stores promote the idea that struggling families can rent furniture, electronics, or cmputers at low prices. However, MCRC's research found that Rent-to-Own stores charged interest rates of more than 300% and cost families more over time than traditional retail stores.

Each year, Maryland rent-to-own stores (RTO) generate $67 million by charging consumers from 2 to 3.5 times the prices other retailers charge for the same merchandise. In Maryland, there are more than 100 RTO stores.

The majority of RTO customers cannot afford the kind of costly credit these stores offer. Surveys have found that most RTO customers have no more than a high school education and earn less than $36,000 a year. MCRC’s research found that RTO customers in Maryland regularly pay more than $1,000 more for refrigerators and televisions than customers at traditional retail stores do. The money families lose renting from RTO stores rather than purchasing merchandise at other stores could be spent on bills or used to build savings. RTO customers also frequently have their merchandise to repossessed and complain about price-gouging, harassment, and misrepresentation of RTO policies.

Maryland lags behind many surrounding states in our protections for consumers making purchases through rent-to-own contracts. West Virginia, New York, New Jersey, and North Carolina have stronger laws regulating RTO stores than Maryland does. Maryland’s RTO law was last revised in 1989 and hasn’t kept pace with current economic conditions and changes in the RTO industry.

MCRC’s research also shows that rent-to-own stores, like payday lenders, charge high fees to those who can least afford them and have little access to traditional retail options. We found that RTO customers pay the equivalent of 65% to 305% annual interest to lease televisions and appliances.